Emergent Opportunities: Coming to a theater near you.

At any given day, there are hundreds if not thousands of startups attempting to disrupt some industry or the other. Fortunately for us, this gives us access to several historical and modern-day examples of such Disruptors to learn from – Walmart, MinuteClinic, Tesla, Netflix, Amazon, Warby Parker, etc. Learning from those past examples gives us the knowledge and tools we would need to identify and avoid our own enterprise from suffering the same fate the incumbent. In addition to avoiding disruption, we can proactively implement strategies within our own enterprise that can help transform ourselves to accept, adapt and adopt the emergent opportunities.

While the past examples are great, what could really help us reflect on what we have learnt is an example that we could look at today that’s in its early stages, where an incumbent is threatened (better someone else than us) so that we can predict how it could play out (for all involved) and then watch it play out as it happens.

It just so happens that such an opportunity has presented itself in the form of MoviePass vs AMC/Theaters.


MoviePass, originally launched in 2011 offering a monthly movie pass for $30/month – dropped its pricing mid-August 2017 to $9.99 / month plan that allows you to watch a movie a day in at a movie theater near you (extra for 3d/Imax – 91% Theater coverage).

With matinee pricing averaging $8 – $11 – if you watch more than 1 movie a month, it’s a no brainer that this saves the consumer money and on the flipside since MoviePass buys these tickets at full price – they lose money on every customer than sees more than 1 movie per month – and the only two (major) exceptions to this all-you-can-watch buffet is that you cannot see the same movie more than once and you can only see 1 movie per 24 hours.

Netflix is one of my favourite modern disruption and I think this is because it’s continued its innovation engine beyond what most of us would have expected an “e-business” to do – Online DVD’s to Streaming to Original content; another similar one is Amazon.

Looking at how Netflix turned out and if used that to look deeper into what could happen with MoviePass, we could end up with a Plan A; followed by a Plan B.

Plan A

Should MoviePass survives the initial bleeding and continue to grow subscription and captures additional funding it has to focus on reducing the cost per subscriber. This can be fairly straight forward:

  • As it is with the excitement of a new buffet – Many will try to watch 1 per day, eventually going to 1 every other day, down to 1 per week, and eventually 1 every other week. The reality is that the # of new movies that come out per month that someone would want to invest 2 hours in, are not that many – this should be expected behavior normalizing over time.
  • If it does end up with a very large customer base – it should be able to obtain discounted tickets – it is currently buying tickets at full price. Theaters do sell at discount via Costco, Sams, BJ’s – etc, so yes, it’s possible and this further reduces its acquisition cost.
  • Many theaters are dated and the ones who have upgraded are usually playing on their 3D and IMAX screens – MoviePass is $9.99 / month with an extra $10 per month if you want to see IMAX or 3D.

For the sake of coming up with a number, we could be looking at a subscriber watching 1 – 1.5 movies a month. With this alone, MoviePass makes money long term even though initially it costs them more; we can chalk this up as customer acquisition costs.

Using its large customer base to negotiate better ticket pricing and again, it increases how much it can make per subscriber.

With most subscribers wanting to watch the movie when it comes out (and it plays on an IMAX or 3D screen), the Avg. Subscriber Value goes up, again increasing what it makes per subscriber.

So, what has Moviepass done? So far it has made the cost around the “theater experience” predictable and the transaction a bit more straight forward. And if we were naive, we would say that this is all they want and that they will be content with the money they make on the subscriptions – but we are not and if we were a movie theater operator/network once MoviePass has grown into a massive subscription base – we should be scared.

Plan B

Now looking at where Netflix ended up once they started with “Online DVD Rentals” – you could expect the following things to happen:

  1. With a large subscriber base – MoviePass opens and sets up its own theaters based on subscriber population, and patterns/behaviours of those subscribers.
  2. A movie theater is an awesome experience – Moviepass could work with Netflix and license any of its amazing Originals for showing at a MoviePass theater; in addition to the usual Blockbusters.
  3. Moviepass enhances its memberships with concessions, family members, etc.

Every one of those items in Plan B increases revenue and as it executes point 1 – 2 and 3 and offers a well-integrated experience and product, over time traditional theaters that charged “too much” will be replaced by MoviePass theaters – which operate via a monthly subscription.


Wait – this has not all happened yet, so now, if you were in AMC’s or some other major theater chain, you could say “We can avoid this” – MoviePass did not just drop its price to $9.99 from $30 for no reason – keep in mind that they’ve had 6 years to pivot and learn what works and what doesn’t. There must be something to subscription based pricing and we should take advantage of this “Emergent” opportunity to transform our business today.

Sadly, the response from the incumbents is what one would expect as history repeats itself – where they call such efforts “distractions” or that “we will be fine” (looking at you BlackBerry) – And AMC is doing the same thing now.

While we cannot predict the future, should MoviePass continue to grow without competition from the incumbents who continue to downplay or ignore the opportunity, Plan B will be inevitable once Plan A is successful and today’s theaters will find themselves disrupted, tomorrow.


Blended Innovation Life Cycle – Readiness Score

This post looks at defining a blended innovation life cycle & an innovation readiness score – It builds on the previous post on Blended Innovation Model

Are we there yet?

Sharing progress on a revolutionary (or even an evolutionary) innovation becomes a challenge when not everyone speaks the same language – Core teams have worked the way they have for years and the MVIT operates with a completely different rule book (or at times; no rules).

A quick reference to the differences between the Core and the MVIT from a previous Blended Innovation Model post:

Screen Shot 2016-04-19 at 2.17.45 PM

You are here (X)

Core teams generally function as a well-oiled machine and follow a SDLC that covers some, if not all of the following:


When looking at the interplay between the Core and the MVIT in a blended innovation engine we should look at how the MVIT lines up its efforts in relation to the existing SDLC (the well-oiled machine everyone is used to); Ideally we end up with two independent cycles that intersect or allow the movement (of products from the MVIT into the Core).

If we list out the various stages across development and implementation and assign responsibilities in the context of Revolutionary vs. Evolutionary innovation projects, we get a holistic view of where and when the MVIT is engaged.

For revolutionary/exploratory innovations – the MVIT (only) will start with POC’s and pilots in a vacuum to prove the value, and once it does, it will look at integrating with core to release the product in a limited scope for additional customer validation. Once larger validation has been performed the product will move to the core team for general availability. The matrix below helps illustrate the primary team(s) responsible for the slot/phase.

Screen Shot 2016-08-29 at 2.48.29 PM

For Evolutionary/ Growth / Acceleration innovations – the idea has already been validated and the primary purpose in MVIT’s involvement is to help rapidly pilot and accelerate the development so that It can be integrated and added without negatively impacting the product roadmap. The Pilot and Limited stages are identical as there really isn’t a pilot phase. Once larger validation has been performed the product will move to the core team for general availability. The matrix below helps illustrate the primary team(s) responsible for the slot/phase.

Screen Shot 2016-08-29 at 2.49.41 PM

Blended Innovation Life Cycle

Based on MVIT’s roles and efforts above – we can summarize and group MVIT’s role and efforts into 4 major phases and refer to it as the Blended Innovation Life Cycle (BILC):



During the MVP phase, the MVIT is focused on three progressive stages:

  1. Inception: Defining a very vague or high level idea that might seem like a good fit for the MVIT to work on.
  2. Fit: Refining the very vague/high level idea to answer “Does it fit?” – if we were to build this, can it integrate with the core product? How would it integrate? The focus here is on reaching an absolute Yes/No assessment on fit regardless of answering things like “when does it fit” or “how long will it take”.
  3. Pilot: MVIT will move forward and hack together a pilot that can be used for internal demos to showcase the idea – majority of the work is likely hardcoded or manually configured – the goal isn’t to make a finished product, but rather quickly show something that can help explain the idea and value add

It’s very likely that the MVIT never gets to stage 3 for majority of the ideas – but for the ones that do make it to the third stage – they then move to the next phase: “Viability”.


In the “Viability” phase the focus is on (internal) Customer Validation – the MVP is shown to the product team and other product roadmap stakeholders (like sales leadership) to assess business value. The product team would look at how the idea would enhance the product roadmap and would help define how the product would integrate with the core. A decision is made to move forward and to introduce to additional customers via limited availability.


In the “Production” phase, the focus is around Limited Availability stage – the MVIT works with the Core Product team to build a closer integration where architecture, integration approach, development, QA implementation and pre-sales plans are defined, development and implemented (by MVIT and Core). For customers who enter limited availability, the MVIT is responsible for supporting its product(s) where MVIT will not only provide front line support where needed, but also deploy and maintain deployment environments.


The “Scale” phase is focused on two final stages

  1. Transition: where the product and its support is transition to the core team – all artifacts, such as code, support guides, implementation guides, etc. are documented and handed over.
  2. Mainstream deployment: where the core team works with operations and support team to take over deployment and support.


By defining the “BILC” in the manner we did – where the core team becomes an integral part of the innovation directly after the pilot, we help implement a process that allows a natural alignment to the Core’s SDLC and we don’t end up with a team that’s releasing under-baked products that don’t integrate well with the core product.

We can also number each stage in the “Blended Innovation Life Cycle” to obtain an “Innovation Readiness Score” and we can then use both the score and the phases to help report on the readiness of an innovation and figure out where we are and what’s next.

Screen Shot 2016-08-29 at 2.26.45 PM

Blended Innovation Model

This post looks at the blended innovation model within an enterprise – it expands on the previous post on A Start-up within an Enterprise

In a market segment/space, the portion that’s captured by an enterprise is its core. Outside this core is the new growth opportunity (the white space) that the enterprise has not (yet) captured; there can be additional enterprises in the same segment/space and over time the segment/space can increase and/or decrease – for the purpose of this post, we will assume that the segment/space stays the same.


A brief re-cap on enterprises, startups and disruption: more details here and here.


For most (enterprise) organizations, the core is grown by the natural evolution of the products/services: as customers use the products/services their requests transform the roadmap. With (somewhat) uniform time and resources, focusing on everything all the customers ask for becomes a challenge and priority is given to the top tier customer base.


Most enterprises operate this way due to the low risk, as the needs have already been validated (due to customer demand). This type of innovation falls under evolutionary innovation.


For startups, the entire “new growth” opportunity becomes the initial target; as time goes on and effort is put into defining the product-market-fit a smaller “core” emerges. In many cases the (perceived) core might pivot several times (see below A -> B -> X) prior to eventually finding its eventual core (if it doesn’t completely fail by then).


The risk is much higher as customer validation still needs to happen, and significant time is spent in validation/product-market-fit. This type of innovation falls under revolutionary innovation.


When these two behaviors exist within their own respective entities (startup and enterprise) and are in the same space/segment they form a complementary relationship – which often results in the demise of the enterprise (unless the enterprise acquires the startup). The customers that are lower in priority for the enterprise move to the startup, either because the product is too feature rich, the needs are not met or they feel that the enterprise has become too big for them (low end disruption, See Clayton Christensen’s work on disruption). As they move out, the enterprise sees that as an opportunity to expand to the new (higher revenue) opportunity and move away from the lower end. As time goes on, the enterprise’s core continues to move outwards and the startup continues to encroach into the enterprises core until the enterprise has nothing left (eventually leading to the startup becoming its own enterprise).




The above describes the outcome when the two innovation modes are two different entities – but what if they were to be combined within an enterprise as a strategic initiative?

Blended Innovation

By making it a strategic initiative to combine both of these models within an enterprise to achieve a blended innovation engine; enterprises can greatly improve their competitive advantage and also accelerate their organic growth. With executive sponsorship, an additional dedicated team would need to be created (the MVIT).

A simple matrix can be put together to understand the differences between the core and the MVIT:

Screen Shot 2016-04-19 at 2.17.45 PM

The interplay between the teams in a blended model is outlined below (to cover additional complexity a multi-core/multi-BU enterprise is used).

An enterprise that has multiple BU’s may cover different verticals in its “new growth” space; however, since each core operates in an evolutionary way, most do not cash in the opportunity to build organically within the shared (white) space.


There also needs to be some sort of “idea allocation engine” so that white space ideas (shared and non-shared among various BU’s), non-core customer requests and other exploratory ideas can be funneled into the appropriate team as there may be several ideas that seem “revolutionary”; but in-fact, they are actually more evolutionary in nature. The VCG (venture champion group) can help be the funnel to ensure that the MVIT is working on the appropriate opportunities (see:A Start-up within an Enterprise).

Once the idea generation and intake funnel is in place, the MVIT can begin piloting product for customer validation by releasing small pilots in the various spaces that iterate in functionality over time with customer involvement (as the viability becomes more obvious).


Developing the pilot in a common language/platform will help with the transition and once the pilot is ready, it would be supported by the MVIT. Should a pilot gain significant traction, the MVIT would continue to support it in a limited availability engagement and once a MVIT produced product enter limited availability, the BU should start planning for support, integration, release and productization under GA.

The integration/transition process from MVIT to Core will likely be significantly more involved than the other efforts.

Depending on the release and GA schedule, the Core will absorb the customer-validated pilot into the core – providing it a competitive advantage that was accelerated with the help of the MVIT that it would otherwise not have had.



In summary

A blended innovation model can greatly improve the competitive advance for an enterprise and also accelerate its organic growth. To successfully implement a blended innovation model it must be taken on as a strategic initiative, backed by executive sponsorship, have an additional dedicated team (MVIT), an idea allocation engine and a process for transition so that the investments in the blended model can be realized.

Blended Innovation: Evolution + Revolution

Evolution: a process of slow change and development.

Revolution: a sudden, extreme, or complete change in the way people live, work, etc.

Evolutionary innovation results in steady gradual growth over time whereas Revolutionary innovation results in rapid growth that eventually fizzles away (it needs another revolution to survive, or in most cases will become evolutionary over time). Both have risk – as a revolution can fail and an evolution can die out. (quick sketches to illustrate this below)


A blended model lets an organization take in (successful) revolutions and accelerate its growth, allowing it to extend its evolutionary life.


To accelerate innovation – both evolutionary and revolutionary should be leveraged and be a part of an organizations growth strategy; but thats easier said than done.

To build up and reflect on the previous learnings/posts the following is a summary on some crucial points that should be taken into account:

  • Define the process and rules for evolutionary innovation and revolutionary innovation (the core team focuses on evolutionary and the MVIT focuses on revolutionary) as a strategic effort.
  • Obtain executive sponsorship for the MVIT.
  • Define GTM strategy and process for revolutionary innovations
  • Communicate strategy to both top and bottom and get buy in.
  • Budget and fund the MVIT.
  • Reduce dependency and ensure the MVIT is a complete unit (has all the resources it needs and does not rely on others)
  • Focus on execution.
  • Optimize often.

An Enterprise cannot disrupt

One of the main reasons I joined Everbridge back in October 2015 was for the opportunity to learn from building a dedicated innovation lab as a strategic effort.

Coming into it, there were bits and pieces I had done over the years at various times/jobs and there was a lot of theory on how one would build a lean innovation lab within an enterprise to help accelerate innovation without negatively impacting the core enterprise model. 
This opportunity allowed me to put it all together and convert theory into practical experience.

Let me add to the title of this post – An Enterprises cannot disrupt because of the way its’ structured; and for the same reasons, it also cannot disrupt itself.
Enterprises already have a well defined model when it comes to how they make money:
value proposition, profit formula, key resources and processes that are needed to deliver to their model.

Startups on the other hand, do not known how money will be made, what really is the value proposition, what the profit formula looks like; they must find product-market-fit before they run out of money.

Running a startup with a model that’s suited for enterprises will hinder disruption; running an enterprise with a model that’s suited for startups, will result in chaos.

Usually the revenue/growth for enterprises comes from focusing on “evolutionary” innovation: innovations that are sustaining – whereas startups get their revenue/growth from focusing on “revolutionary” innovation: innovations that are disruptive.
The chart below takes various opportunities and attempts to size the revenue size and also categorize the type of innovation – before you disagree with a “but wait, there are startups that have more revenue that large enterprises”,  its important to note that every (successful) startup, does eventually become an enterprise and with that, it’s focus will also likely change.revenuerevolution
Since enterprises tend to focus on sustaining innovations, they leave the door wide open for startups to come in after new-growth markets that enterprises are not focused on or come in with a low-end disruption taking away existing customers who are okay with a lower feature product/service that comes with a lower price tag because startups will accept the (much) lower margins.
As the low-end moves out, enterprises go up the chain, focusing even more on their higher-valued accounts (charging higher prices to their most demanding customers) because that’s traditionally where they’ve found the money. As startups continue their low-end disruption moving upwards, always taking away the new lower-end as they get more feature rich; enterprises continue up the chain as well – only to one day find out there isn’t anything left at the top and to take from and the bottom has cleared away. (Disruptive Innovation: Clayton Christensen)
By making innovation a strategic effort and building a startup within the enterprise that goes after revolutionary innovations; it can diffuse and transition revolutionary innovations to evolutionary innovations – in other words, it can disrupt by not disrupting and stopping others from disrupting itself.

Reasons innovation teams within an Enterprise fail

  1. A dedicated “innovation” team that works outside the company’s core “processes” (a.k.a. red tape) does not exist
  2. You share or borrow resources from other teams who help out in addition to their core duties or have a “20% time” policy.
  3. A budget to spend on non-core R&D and other expenses was never factored in and/or approved.
  4. People expect the output from this “innovation” team to follow the same rate of return as your core product teams.
  5. You plan on engaging other (Architects, DevOps, Eng., etc.) core teams after all the work is done to come up with some sort of transition plan.
  6. No committed initial plan on what you will go after initially.
  7. No pass/fail metrics were setup.
  8. You do not have complete buy in from the top.

While all of the reasons above carry weight, if I had to pick one, it would be the first reason – the lack of a dedicated innovation team.

For most enterprises that have a part-time innovation team; all that innovation gets pushed aside when shit hits the fan – then its all-hands-on-deck – innovation, becomes an afterthought.

From a previous post: “It’s important for an enterprise to have a team that focuses on innovation as a “full-time strategic” activity and not as a “part-time ad-hoc” effort in order to have a greater chance of success with innovation – here is why: 75 % of venture-capital-backed start-ups fail; and 50% of backed start-ups make it to their 4th year. These startups, usually consist of dedicated entrepreneurial teams trying to build something, spending 100% of their energy, every minute of every hour trying to make it successful – they are in it full time. If a startup’s “full-time” innovation effort has such a low rate of success, what will be the success rate of a part-time effort?”

A dedicated team must be created if an enterprise wants to make innovation a strategic effort. If you have no one fully focused on innovation, you’ve decided not to focus on innovation.

Trends to look out for in 2016

  1. Scalable video streaming-as-a-service for “critical” use will become mainstream, allowing several disconnected parties to be connected in real time and allow for the streams to be recorded and audited.
  2. Collaboration at the tap of a button will become a priority – Moving from an afterthought to a forethought, well integrated as part of a workflow and will be moving away from textual to visual (video) collaboration.
  3. Predictive analytics with preventive measures around service performance and optimization will continue to be a big ask.
  4. There will be a larger focus on building product offerings around personal safety/security – i.e. in the case of a disaster/attack, people will want to know that you are safe, what your last location was – or if you are headed to an impacted zone.
  5. Customers will expect well integrated solutions that provide complete end-to-end workflows with an emphasis on usability.
  6. Enterprise situational engagement will be an interesting trend where corporations will want closer social engagement for critical events, such as threats, harassment, anonymous tips, etc.
  7. Connected Health will continue to be an interest for many with a large dependency on EHR integration’s for enterprise hospitals – virtual beds will become more common; however small to medium provider groups will more readily pick up innovative tools showcasing the benefits of technology in providing better care.

A Start-up within an Enterprise

Enterprises are designed to execute a repeatable and scalable business model whereas startups are designed to search for a repeatable and scalable business model.

Since the core business model(s) are known for an enterprise, they already have product-market-fit, distribution channels, revenue model, the cost to deliver, financial metrics, job titles/responsibilities and so on. Due to the knowns, failure to meet a goal, revenue, product delivery, service, etc – is a failure in execution of an individual and/or organization to perform to a known set of success criteria. Enterprises also have policy, procedures and structures that make them efficient execution machines.

Startups have finite time and resources to find product-market-fit before they run out of money. Therefore they trade off certainty for speed, adopting a minimum viable approach, iterating and pivoting as they fail, while learning and discovering their business model. Due to this startups have speed, urgency, agility, low-cost, rapid experimentation and high chance of innovative disruption as an advantage.

An Enterprises can accelerate its organic-growth by adopting startup practices (lean methodology) but to really be innovative, it needs to build a “startup within an enterprise”.

This post provides a high level concept that can be used to build a system/structure for building a “Startup within an enterprise”; the Enterprise it targets is large to very larger where the enterprise has several verticals and each vertical has several business units that collectively contribute to the enterprises EBITA.

Innovation within an Enterprise

In a nutshell, there are two ways enterprises can foster innovation:

  1. Strategic: Create an innovation lab/team, and/or
  2. Ad-hoc: Jump-start it

Strategic: There are several examples of enterprises that have built innovation labs/team; GE, Intuit, HP, P&G, Xerox, Coca-Cola, Fidelity, Google – to name a few. These enterprises made a strategic decision to build out such innovation labs as part of their core that required a varying mix of new organizational structures, new hires and substantial investments.

Ad-Hoc: There are also examples of enterprises that take and ad-hoc approach and “jump-start” innovation with the help of hack-a-thons, 20% time, 1 week per quarter, offsite camp, cash-prize; Google, MIT, Harvard are some that frequently run these programs .

One of the biggest challenges with innovation within an enterprise is “culture”. It’s interesting to note that most enterprises that have a lab/team (strategic innovation) also run ad-hoc innovation programs – this allows them to have a focused delivery of innovation and also have an organization wide culture that supports and encourages ideation, innovation and execution of ideas.

It will be more challenging for an enterprises that only run and rely on ad-hoc innovation programs to be successful with innovation as innovation becomes a “part-time” effort.

It’s important for an enterprise to have a team that focuses on innovation as a “full-time strategic” activity and not as a “part-time ad-hoc” effort in order to have a greater chance of success with innovation – here is why: 75 % of venture-capital-backed start-ups fail; and 50% of backed start-ups make it to their 4th year. These startups, usually consist of dedicated entrepreneurial teams trying to build something, spending 100% of their energy, every minute of every hour trying to make it successful – they are in it full time. If a startup’s “full-time” innovation effort has such a low rate of success, what will be the success rate of a part-time effort?

A dedicated team should be created if an enterprise wants to make innovation a strategic effort. If you have no one fully focused on innovation, you’ve decided not to focus on innovation.

Innovation buckets

Innovation falls into two main buckets: “Core” innovation and “New-Growth” innovation

  1. Core innovation: Initiatives focus on enhancing existing product, for existing or new customers; Revenue comes in earlier and the initiative is tied to short-term financial goals
  1. New-growth innovation: Initiative’s focus on new product/segment/markets/business models for existing or new customers; Revenue takes longer to come in and the initiative is tied to long-term financial goals.


Mind the Gap

There could be various reasons why an enterprise would be looking to improve innovation efforts – a common one is to improve revenue. Almost everyone innovates even when they are not actively trying to improve innovation and that’s because they sit in Box A, where they may change support/maintenance rates, continue down their roadmap enhancing offerings – if they do not, revenue will not grow and may even drop.

Let’s assume that the organic-growth target is 6%, if the enterprise is sitting in Box A, and only hitting a 3% target, you have a gap and the enterprise needs to figure out how it’s going to get the additional 3%.

With some luck or heroism they may move to Box B; it’s also possible that the enterprise may be actively trying to peruse the next level of core innovation but this is incremental and the growth will be short-term and will likely only get them an extra point or so helping them grow to a 4% growth.

If the effort to go from each box to the next is a 2x the previous then this is the effort from going from A to D is diagrammed in the following chart:


The move from A to D (or even c) is not incremental, it’s disruptive. Most enterprises do not operate in a way that can introduce disruptive innovation to grow, not because they do not want to, but because the core of their business and growth is built on the stability of known, incremental innovation.

Enterprises needed to strategically use new-growth innovation to “bridge the gap” between the target growth rate and what they can get from core innovation.

Focus on Strategic Innovation

In 2000 Proctor and Gamble underwent a massive effort to build an innovation “factory” that helped them increase their success of innovation by 3 times – A “factory” is not what is being proposed here.

There are some simple learnings from the lean methodology that I think should be used as core principles when focusing on innovation efforts, when innovating:

  • Validate and build for market – not for one customer
  • Do not feed the zombies – recognize failures and fail fast; learning from it.
  • Focus on instant gratification, short circuit delivery cycle and getting to the next milestone.
  • Recognize that not all opportunities solve problems – some only enhance pleasure.
  • Minimum viable “everything”

Keeping the “Minimally viable” point in mind – strategic innovation should fall in the hands of a dedicated team and this dedicated team should be a reflection of this principle, it should be a “Minimum Viable Innovation Team” (MVIT).

The MVIT consists of 2 to 3 individuals that complement each other with the following two skills:

  • Be strong in business sense and/or
  • Strong in technical skills

One could say that the MVIT is like a “startup within an enterprise”.

In addition to having dedicated team – we need an orderly, reliable and repeatable process that will give the entire innovation effort a structure and discipline; we will call this the “Minimum Viable Innovation System” (MVIS).

Minimum Viable Innovation System

The MVIS is a cycle that repeats itself that has 4 stages: Identify, Champion, Deliver, Reflect



In this phase the Minimum Viable Innovation Team works to:

  • Identify innovation opportunities
  • Validate and shortlist innovation opportunities
  • Define success/failure criteria
  • Obtain (borrow) resources
  • Manage/develop/deliver innovation product(s)


In the above, the MVIT (using lean methodology) will work with business units (or on its own) to identify, validate and define success/failure criteria for every idea. Opportunity identification and validation will be a 1-3 week effort where:

  • a few key individuals within a business unit will be identified for the effort
  • these individuals will meet several customers and probe for unmet needs;
  • They will also look within their BU where innovation opportunities may already be underway but not recognized as a new-growth opportunity (avoid zombies).

For each opportunity that comes out of this effort, it must satisfy at least one of the following:

  • it should be a pain point that no one is address well, or
  • Something that must be done better due to a legal/regulatory need, or
  • It must be something that can be successfully built faster than others because we have a secret sauce that gives us advantage over others.

In addition to uncovering the opportunity, the BU and the MVIT will work on estimating the opportunity potential and the resource need to deliver.


Innovation opportunities come with strategic uncertainty and since the goal is to build an innovation system, we need a team that will keep the MVIT in check by having the autonomy to make decisions about starting, stopping, or redirecting innovation projects. In addition to keeping the team in check, it will also approve/deny budgetary requests for such projects very much like a Venture Capitalists function for startups – we will call this the “Venture Champion Group”.

The MVIT works with the VC group to gain approval.

  • When working with the VC group to get approval for an innovation opportunity, the MVIT does not need every VC to approve – it needs just need 1 who deeply believes in the opportunity.
  • Each innovation opportunity should have a threshold investment amount that the MVIT can spend without asking for approval; i.e. 20k of a 500k approved budget for an innovation opportunity.
  • As the opportunity and innovation delivery progresses – the team may run into a need for a break-risk investment where additional investment may be needed to get over a risk; i.e. a public cloud based MVP was being built with a $50k approval, however there is now a need to have the MVP on a private cloud that makes the infrastructure cost significantly up.



With the approved list of innovation opportunities, the MVIT works with the various BU’s to deliver, again using lean methodology.

During the Identify phase resource needs would have been discussed. Ideally for a MVP the BU and MVIT should look at using existing resources as that drives engagement and builds a culture of innovation. Resources could be from within the BU or from other BU’s who may be interested in building and delivering the opportunity.



With each iteration of this cycle – there will be lessons learnt that should be reflected and acted upon. The reason the MVIS is a system is so that there is opportunity to optimize and follow a repeatable process. To build an engaging culture of innovation these lessons, the successes and failures should be shared with others outside who are outside the MVIS; some do this with the ad-hoc innovation effort mentioned earlier

Cost and Revenue

In the startup world, there are various stages of funding and exits: seed, angel, venture, IPO, acquisition, etc. A startup within an enterprise will likely not run into those, but that doesn’t mean we cannot learn from them and model our cost & revenue after them.

MVI Fund

Creating a MVIT is a strategic decision and will require some sort of fund allocation to cover the salaries of the 2-3 person team; in addition to the salary, the enterprise should consider a sizeable amount it is willing to risk. Since both the activities: creating a dedicated team and investing in opportunities are risky, we can put the cost of both of these in the fund. If the salaries of the team require $500k / year and the enterprise wants to invest in 10 innovation opportunities each year at an average $100k per opportunity, the allocation of the fund needs to be at $1.5M / year, where $1M can be a variable expense but the $500k is fixed.

A simple way to fund the MVI Fund is to split the cost among all the BU’s, or depending on the BU’s own size, you could formulate a MVI Fund contribution amount; i.e. the fund contribution shouldn’t be the same for a BU that generates $10M / year vs. a BU that generates $60M / year.

There are other options as well, such as allocating the funding as an investment but that then goes into more complicated accounting methods.

Failure Hit

When an idea fails, the investment is lost, the following points should be considered to understand who takes the hit.

  • The MVIT is mostly responsible for building/delivering the opportunity; the BU rides shotgun
  • MVIT works with the approved allocation for an opportunity from the MVI Fund; i.e. additional resources are needed

So when an opportunity fails the BU does not (directly) take a hit, the fund does.


It is the MVIT that is building the MVP and supporting the product as lean as possible; it should be able to support 1-2 customers with shared front line resources from the BU that has the domain knowledge. Once the opportunity is ready for larger market adoption, its ownership/management is moved from the MVIT to the BU, where the BU buys the opportunity from the MVIT. The following points can help illustrate the terms of the transaction and where the revenue is assigned.

  • MVIT builds MVP, revenue target to exit MVP is $500k, at a cost of $100k
  • MVP brings in some revenue, 100% revenue assigned back to fund
  • MVP hits $500k, reached 2 customers, it’s not ready for Market/post MVP
  • BU “buys” 90% of the opportunity for $200k (2x cost);
  • Opportunity continues to bring in revenue, 90% assigned to BU, 10% assigned back to fund.

This allows the fund to organically-grow and have a return on the investments made by the fund.

Why? – Because its not easy.

The reality of innovation is that it only sounds easy – but it is not. Startups make it seem easy to innovate, and for them it is natural. Enterprises on the other hand just don’t seem to be very innovative.

“Empty your mind, be formless, shapeless — like water. Now you put water in a cup, it becomes the cup; you put water into a bottle it becomes the bottle; you put it in a teapot it becomes the teapot. Now water can flow or it can crash. Be water, my friend.” – Bruce Lee

Startups can be water, but enterprises with their structures, metrics, measurements and financial discipline cannot.

The MVIS along with the other pieces allows an enterprise to build a hybrid model where you can benefit from the strengths of both so that you can have the discipline of an enterprise but also have the fluidity of a startup. The MVIS allows you to have an engine that brings with it some repeatability and opportunity for optimizations.

A major challenge that enterprises have is “culture”, specifically “innovation culture”; changing an enterprise culture is a long-term commitment. At the end of the day, everyone needs to be responsible for innovation, you cannot have just 1 team lead innovation efforts and not have a culture around it and likewise, you cannot have a culture around innovation that will give you the growth needed if you do not have a team focused on the effort.

The main reason enterprises fail at innovation is because they simply do not recognize the long-term cultural and strategic effort needed to become “innovative”; The MVIS helps put a framework in place that an enterprise can build upon.


This post borrows and builds upon ideas/concepts from various sources:

  • The lean enterprise – Trevor Owens
  • Works from Innosight
    • It heavily borrows and builds on the post from Scott Anthony
  • Concepts from Steve Blank
  • Cool icons for some diagrams by icons8.com

I dont know about EHR, but video killed the radio star

Video killed the radio star.
Pictures came and broke your heart
So put all the blame on VCR

We’ve seen it happen before, and it repeats itself – something will always replace the current best thing.

Myspace killed Six degrees (and many others); Facebook killed Myspace.

Healthcare in general has been making great advancements within itself. The infusion (and overlap) of tech advancements with healthcare have helped accelerate health IT disruption. Technology and specifically mobile devices have significantly changed how we communicate and interact.

Email killed paper mail; SMS/Text messages killed phone calls; WhatsApp killed SMS.

Mobile killed the Desktop.

The introduction of Electronic Health Documentation gave us Electronic Health Record (EHR) systems, killing paper based documentation. While many software vendors existed in the EHR space, government incentives brought on a whole set of technological initiatives and helped Health-IT become a hot space leading to mass disruption.

With the help of wearable devices, mobile devices and apps, continued government incentives and startups, innovation in Health IT is happening multidimensionally.

As more people move away from emails, phone calls and in-person discussions to Tweets, Facebook posts, WhatsApp and other quicker ways to interact with others, the reliance on mobile technology grows and becomes the preferred way to communicate.

Personally, VOIP was big for me since it allowed me to call my parents internationally without paying ridiculous land-line rates (thanks Vonage); this then transitioned to Skype where my dad would facilitate the calls for my mom since it was still slightly “technical” as you had to use a laptop. Today, my mom Skypes me with her iPhone, and while, she cant type, she sends me audio messages via WhatsApp. I send her videos and pictures of the fun things we do and she loves receiving them. Without all the innovation in technology, I’d still be paying $3 a minute to call her.

It goes without saying that the way people communicate and interact has constantly evolved over time.

Adoption of technology varies by generations/age-groups as someone below 50 is probably more included to use technology than someone over (respectfully ignoring outliers here). The doctors and nurses who preferred paper based documentation over electronic have probably retired by now (again, ignoring outliers), and if the current/next younger generation(s) are more readily going to adopt technology, how does their daily tech use influence how they want to work with technology in Health-IT?

When my kids see a Kiosk, they almost always expect it to be touch friendly, just like any device with capacitive touch, and when things don’t drag, or respond to their touches they get frustrated.

Previously I wrote a quick post on Innovating the Physicians Inbox which used a twitter look/feel to present content in a way that makes it quicker and easier to digest; with intentional drill downs to get additional details/info.

Today, “Secure” text messaging, is making it rounds in Health-IT since almost everyone has a device on them and communicating using their device is just more natural. These secure text message apps pretty much take the idea behind “WhatsApp” (message, audio, image, video, real-time chat) and wrap security around it (HIPAA) and while this accomplishment isn’t small, it’s still missing a major piece.

I remember using IRC back in the day, it was useful and fun. Several months ago, I ran into Slack and I fell in love with it. With its big and powerful integration capabilities, it was a game changer… while it may not be here to “kill” anything, it is definitely the platform to wrap everything else under. Using Slack integrated with: asana + bitbucket + crashlytics + dropbox + raygun + Jira meant that I no longer had to visit any/each of those platforms directly. I had one tool to consume them all, and best yet, was that I could collaborate with all the people I needed to, in one place, with the needed context.

And that is exactly, what is missing from these “Secure” text messaging apps – Context; specifically, Patient Context.

Without integrating with EHR systems, there is a disconnect between the context and the discussion. By integrating with other systems, Slack makes the external context, internal and the collaborative discussion becomes more meaningful.

While today’s hype is around “Secure” text messaging as a tool that helps collaboration, it really should be about collaboration as a platform (rather than a tool). While this platform wont “kill” EHR and other systems, it will integrate with them so that providers can more naturally collaborate on patient care leading to improved communication among care providers as well as communication between care providers and patients leading to a higher quality of care.